Slide 1: Opera Software: First quarter 2010
Opera Software: First quarter 2010
Slide 2: Agenda
Agenda 1. Highlights Lars Boilesen, CEO 2. Financial review Erik Harrell, CFO/COO 3. Operations review Lars Boilesen, CEO 4. Q&A
Slide 3: 1Q 2010 Financial highlights
1Q 2010 Financial highlights Financial metric 1Q10 1Q09 Status report (MNOK) (MNOK) Revenue Total revenue 151.4 163.0 Profitability EBITDA 14.7 31.3 EBIT 5.4 24.9 Cash generation Operating Cash -10.2 59.7 Flow Free Cash Flow -17.2 51.3 • Revenue in line with expectations; cost lower than expected •
Slide 4: Highlights (1Q10 – 2Q10TD)
Highlights (1Q10 – 2Q10TD) Operators • Volume growth with tier-one operators such as AT&T, Vodafone, SKT, MTS, Telkomsel: total of 3.5 million Opera Mini users in April • Strong deal flow: Telkomsel, MTS, Megafon, TIM, Smart, Tigo – all recently or about to launch Opera products Mobile/Devices • Str
Slide 5: Financial review
Financial review
Slide 6: A note from our lawyers
A note from our lawyers DISCLAIMER: This presentation contains, and is i.a. based on, forward-looking statements regarding Opera Software ASA and its subsidiaries. These statements are based on various assumptions made by Opera Software ASA, which are beyond its control and which involve known and u
Slide 7: 1Q 2010 Financial highlights
1Q 2010 Financial highlights Financial Metric 1Q10 1Q09 Status report (MNOK) (MNOK) Revenue Total Revenue 151.4 163.0 Profitability EBITDA* 14.7 31.3 EBIT** 5.4 24.9 Cash Operating Cash -10.2 59.7 Generation Flow Free Cash Flow***: -17.2 51.3 *Non-IFRS EBITDA excludes stock option costs and an extra
Slide 8: 1Q10 Financial review
1Q10 Financial review MNOK 1Q2010* 1Q 2010 1Q 2009 Q on Q* Desktop + 52.0 52.0 47.0 11% Internet Devices + 99.4 99.4 116.0 -14% Total revenue = 151.4 151.4 163.0 -7% Payroll and related expenses - 100.2 127.0 101.2 -1% Stock option costs - 4.4 3.4 3.7 20% Depreciation and amortization - 4.9 4.9 2.7
Slide 9: Financial highlights: 1Q07-1Q10
Financial highlights: 1Q07-1Q10 Operating revenues (NOK Million) EBITDA* (Non-IFRS) (NOK Million) * Non-IFRS EBITDA excludes stock option costs and an extraordinary one-time charge of MNOK 29.1 in 1Q 10
Slide 10: Revenue growth drivers
Revenue growth drivers Grow active users with operators Grow desktop users Grow Opera Mini user base and ARPU Drive volumes from tier-1 connected-TV vendors
Slide 11: Revenue: Customer Type (1Q10)
Revenue: Customer Type (1Q10) • Operator revenue came in generally in line with expectations • Desktop revenue slightly less than expected • Device and Mobile OEM revenue stronger then expected 100% 160 90% 140 80% 120 70% 100 Other 60% Other Desktop 80 Desktop 50% Devices Devices 40% 60 Operator Op
Slide 12: Revenue: Operators (1Q10)
Revenue: Operators (1Q10) • Operator revenue generally in line with expectations • 50% Operator Opera Mini user growth end of 1Q10 vs end of 4Q09 • User growth driven by Vodafone, Motricity (AT&T) and SKT, in particular • Increase in operator license revenue offset by decline in NRE revenue MNOK Ope
Slide 13: Revenue: Device OEMs (1Q10)
Revenue: Device OEMs (1Q10) • Device OEM revenue higher than expected due to higher shipments • Revenue driven primarily from the gaming console, connected TV and IPTV segments • License revenue: 60%+ of revenue MNOK Device OEM Revenue 40 35 30 25 20 15 10 5 0 4Q09 1Q10
Slide 14: Revenue: Mobile OEMs (1Q10)
Revenue: Mobile OEMs (1Q10) • Mobile OEM revenue higher than expectations • NREs stronger than expected • License revenue < 25% of mobile OEM revenue MNOK Mobile OEM revenue 40 35 30 25 20 15 10 5 0 Opera Mobile shipments in 1Q10 from Mobile OEMs was 2.9m 4Q09 1Q10
Slide 15: Revenue Type: Internet Devices (1Q10)
Revenue Type: Internet Devices (1Q10) • NRE revenue as expected, with growth driven by mobile OEMs • M&S revenue as expected, with drop from 4Q normal related to one customer • Opera Mini revenue generally as expected, with increase in license revenue offset by decline in NREs Revenue type 4Q09 (MNO
Slide 16: Revenue: Desktop (1Q10)
Revenue: Desktop (1Q10) • User growth in line with expectations • ARPU was slightly less than expected in seasonally weaker 1Q versus 4Q Monthly Desktop users Desktop Revenue (mm) (end of quarter) 60 60 50 50 40 40 30 30 20 20 10 10 0 0 4Q09 1Q10 4Q09 1Q10
Slide 17: Revenue: Opera Branded Mini (1Q10)
Revenue: Opera Branded Mini (1Q10) 60,000,000 Monthly users 50,000,000 • Solid growth continues 40,000,000 • High focus on increasing ARPU 30,000,000 and converting users to Operator 20,000,000 branded or Co- branded revenue 10,000,000 generating users 0
Slide 18: Key user metrics FY2010 - YTD
Key user metrics FY2010 - YTD January April Metric 2010 2010 Operator Mini 2.1* Million 3.5* Million Users Opera Branded 50 Million 59 Million Mini Users Desktop 48 Million 52 Million *Operator branded + Opera/Operator co-branded agreements
Slide 19: Cost management priorities
Cost management priorities Budget discipline • Reduced cost growth Constrained headcount • Reduced cost growth Project prioritization • Higher margin on projects Resource allocation • Higher margin on projects based on ROI Continuous optimization • Reduced cost per user of hosting facilities
Slide 20: OPEX development
OPEX development OPEX (NOK Million) Cost line 1Q10 vs Comments One time extraordinary cost 1Q09 Other OPEX Payroll -1% • Headcount 707 vs 686 end of1Q09 (excludes Depreciation terminated employees in Stock Options 1Q10) • FX benefit versus 1Q09 Payroll Stock +20% • Primarily related to 180 options o
Slide 21: EBITDA development
EBITDA development 1Q 2009 / 1Q 2010 (NOK Million) * Year over Year, 1Q 2010 vs 1Q 2009
Slide 22: Strong capital structure
Strong capital structure Balance sheet highlights: Metric 1Q10 (MNOK 1Q09 (MNOK) Cash 483 628 Interest bearing debt 0 0 NWC* -58 -57 Equity 578 630 * NWC is defined as Total current assets excluding cash and cash equivalents minus Total current liabilities.
Slide 23: Cash flow 1Q10
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Slide 24: Financial high-level summary: 1Q10
Financial high-level summary: 1Q10 • Revenues: Generally in line with expectations • Operator revenue generally as expected • Device OEM revenue slightly higher than expected • Mobile OEM revenue slightly higher than expected • Desktop revenue slightly lower than expected • Expenses: Better than exp
Slide 25: Financial high-level summary: 2Q10
Financial high-level summary: 2Q10* • Revenues: Expectations vs. 1Q10 (constant currency)* • Very solid revenue growth from operators due to new customer launches and continued growth from existing customers • Slight increase in desktop revenue as move into seasonally weaker 2Q • Very solid revenue
Slide 26: 2Q 2010 Guidance
2Q 2010 Guidance Metric 2Q 2010 Revenue* MNOK 165-170 Expenses** MNOK 151-154** *Assumes currency remainder of 2010 (NOK 6.2 /USD, NOK 7.8/EUR). ** Includes payroll, other OPEX, stock option costs and depreciation
Slide 27: Operations update
Operations update
Slide 28: Opera's road to growth in 2010
Opera’s road to growth in 2010
Slide 29: Key strategic objectives
Opera’s road to growth in 2010 Key strategic objectives 1. Build volume with existing tier-one operator customers 2. Sign up additional operators and mobile manufacturers 3. Monetize the 55 million+ mobile users 4. Strengthen leadership position in the growing connected TV/ Devices market 5. Continu
Slide 30: Objective #1: Build volume with existing operator customers
Objective #1: Build volume with existing operator customers
Slide 31: Status report: Traction with global operators
Status report: Traction with global operators Opera users from operators 4,000,000 Monthly subscribers 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10
Slide 32: Vodafone rolling out Opera Mini to 21 markets
Vodafone is now actively rolling out Opera Mini to 21 markets as part of its Vodafone 360 strategy • Vodafone have launched Opera Mini 5 + Widgets in South Africa, Turkey and Tanzania • Coming up: 16 more markets before end of summer • Marketing includes group level PR, followed by local PR, support
Slide 33: Majority of Vodafone launches yet to come
The majority of Vodafone launches are yet to come – most are slated for summer 2010, with additional follow-up launches of Opera Mini widgets in the fall 7 6 5 4 3 2 1 0 March April May June July August
Slide 34: Commercial progress: SKT and AT&T
Commercial progress: SKT and AT&T • Opera Mini shipped on Samsung Omnia • Very strong unique user growth so far • High conversion rate • More phones underway • High growth: Very strong user growth since launch • 11 devices launched, more to come
Slide 35: Examples: Att.net in-store material
Examples: Att.net in-store material ARPU panel – Mobile Web AT&T Magazine: Access the full web Handset POS
Slide 36: Objectives #2 and #3: Additional operators, monetize users
Objective #2: Sign up additional operators and mobile manufacturers Objective #3: Monetize the 55 million+ mobile users
Slide 37: Status with key operators
Status with key operators • Products launched, building customer base • Launched in Moscow, Ural, Siberia, more to come in 2Q • Launch in Russia and Norway targeted for 2Q • Launched. Strong user growth. • Signed. Launching in 2Q
Slide 38: Status with key operators
Status with key operators • Targeted for launch in 2Q • Launched in Honduras. To be launched in Guatamala in May
Slide 39: Opera Mini operator co-branded launches
Opera Mini operator co-branded launches Q1-10 Q2-10 Q3-10 Signed operat- ors EG and CN RU IN Middle East ID ZA TR Priority target UA Mexico and markets BR Latam US PH and SE Asia
Slide 40: This just in (May 19)
This just in (May 19): • As part of a new deal, Sprint pre-installs Opera Mini 5 on three devices for Virgin Mobile USA, one of Sprint's prepaid brands. • INQ, a global manufacturer of mobile phones, pre-loads Opera Mini 5 on a BREW device, with additional devices in pipeline (on multiple platforms)
Slide 41: Why operators choose Opera
Why operators choose Opera To drive data revenues and increase sales of data plans • A high speed Internet service that runs on all devices and networks • A necessity on most feature-phones, a must on feature phones and complimentary on smartphones To enable services • Access to portal and premium s
Slide 42: Reality check: Large OEMs target the entire value chain
Reality check: Large OEMs target the entire value chain… Applications Products OS Apple Google Nokia Microsoft … leaving operators to deliver the pipe only
Slide 43: Mobile manufacturers: MediaTek
Mobile manufacturers: MediaTek • Opera signs agreement with one of the leading original device manufacturers in the world: MediaTek Inc. • Headquartered in Taiwan, MediaTek is the world’s second largest supplier of mobile phones, closely behind Nokia • On April 26, Opera was included in the Vogins A
Slide 44: Mobile manufacturers: Opera works with operator-friendly OEMs
Mobile manufacturers: Opera works with operator-friendly OEMs • Huawei selects Opera Mobile 10 • Huawei shipped more than 30 million handsets in 2009 • Ericsson eStore, powered by Opera. A groundbreaking application store. • Unnamed customer: Opera to be shipped on Android-based device, from South A
Slide 45: Opera Mobile: 8 new models in 1Q
Opera Mobile: 8 new models in 1Q ASUS ASUS M10 HTC HTC Touch 3G HTC Mini KDDI Sharp SH005 Sharp SH006 Sony Ericsson BARONE Toshiba E08T O2 O2 XDA Ignito HTC Touch 3G
Slide 46: Opera Mini: 33 new models in 1Q
Opera Mini: 33 new models in 1Q Lemon Mobile Motorola Samsung iQ 707 Motorola i1 Samsung BourbanST Nokia Samsung Blackbox Samsung Jack MR LG Mobile Nokia C3 Samsung A687 LG GR700 Nokia 2690 Samsung GT-S3550 Nokia 7100 LG GS290LG Samsung SGH-A767 Nokia 7230 LG Shine 2 Samsung SGH-A777 Pantech Sony Er
Slide 47: Objective #4: Strengthen leadership in TV/Devices market
Objective #4: Strengthen leadership position in the growing TV/Devices market
Slide 48: Opera continues heavy foray into connected TV/Devices market
Opera continues heavy foray into the connected TV/Devices market • Two unnamed Japanese manufacturers • Unnamed, leading unnamed manufacturer in Asia • Loewe • Realtek • Others: PeerTV, Ocean Blue, Max communications
Slide 49: Opera on Loewe connected TVs
Opera on Loewe connected TVs • Loewe connected TVs • Features Opera’s Web browsing, widgets and HbbTV implementation • One-stop shop for delivering superior content optimized for the television screen
Slide 50: Opera on Realtek Digital Media Processors
Opera on Realtek Digital Media Processors • Realtek’s Full-HD Digital Media Processor • Web tools to implement a full Web browser, create user interfaces and design unique Web applications • Features Opera Devices SDK
Slide 51: PeerTV taking advantage of Opera's SDK
PeerTV taking advantage of Opera’s SDK • More personal TV-viewing experience for PeerTV customers • PeerTV uses Opera Web technology to bring full Web browsing, widgets and over- the-top Web content • Features Opera SDK on PeerStation STBs
Slide 52: Objective #5: Continue to grow desktop user base
Objective #5: Continue to grow desktop user base
Slide 53: 110+ million people use Opera
110+ million people use Opera Opera Desktop Opera Mini 50 million 55 million
Slide 54: Opera 10.50, the fastest browser on Earth
In 1Q, Opera • The ultra-scalable business model is already in place introduced Opera • The equation is simple: 10.50, the fastest More users = more revenues browser on Earth
Slide 55: Opera builds further momentum on desktop
Opera builds further momentum on desktop Opera Desktop Revenue (MNOK) • Continued revenue growth • 52 MNOK: increase of 11% compared to 1Q09 • Continued user growth • 52 million Opera Desktop users: increase of 37% compared to 1Q09 • Choice Screen project in EU • Opera sees relatively strong long-te
Slide 56: Opera Mini approved for Apple App Store
APPROVED • 1 million downloads in first 24 hours • The third most popular device among Opera Mini users (after Nokia and Sony Ericsson) • More data to become available in the next State of the Mobile Web report
Slide 57: Opera's vision: best Internet experience on any device
Opera’s vision is to provide the best Internet experience on any device.
Slide 58: Q&A
Q&A